Over the summer, I organized a conference for the Institute for Energy Research (IER). My purpose was to present truly “consensus” facts from the economics literature on carbon taxes. If you will go with me on this journey, I am pretty sure you will realize that the case for a carbon tax is much weaker than you have been led to believe, ESPECIALLY if you are a professional economist interested in climate change issues.

I gave the first talk, shown below. If you want to see my commentary on this video, go here. But I encourage you to just click “PLAY” and let the deprogramming begin…

12 Responses to “A U.S. Carbon Tax: The Rest of the Story (Part 1 of 4)”

I think it is amazing that you are able to debunk the alarmists, even using their own #’s. The most “alarming” thing that is shown is how unbelievably costly limiting Co2 is, and how little effect it has on limiting temperature increases (again, using their own figures)

This makes me wonder….. Can’t we use the climate models and plug in data for the 1800’s and see if the models spit out what actually occurred from 1800 to 1899? Wouldn’t this be the easiest way to disprove GW alarmists? Is it even a possibility in their models for global temperatures to decrease with increasing levels of Co2?

Is there some justification for using the average instead of the median of the experimental results when calculating the SCC? The median is considerably lower than the average in all three distributions. I have a problem with giving the tail so much weight without some sort of justification.

Ken P. I don’t remember reading them explicitly say why they use the expected value instead of some other approach, but actually in the literature people complain about the opposite: They say uses the expectation doesn’t give enough attention to the tail risks.

They could be right, but you rarely hear of people worrying about tail effects with other abstractions.

Suppose we were calculating the SCC of the ACA. A good argument could be made that one or more entrepreneurs of the Bill Gates/Steve Jobs/Sergey Brin caliber may fail due to the additional financial strain at the early stages. Even if that is highly unlikely, the cost to society if it did happen could be quite large.

My guess is that the tail predictions are runs that randomly assign a very high value to the carbon forcing effect- like 4C or 6C (or higher) increase in temperature per doubling of CO2. Recent temperature trending is not on the side of a big forcing effect. If this model were run using more recent temperature increase assumptions, I’m sure the numbers would be much lower and quite possibly negative even at low discount rates.

I’m always told by Keynesians that without the wonders of their artificial “stimulus” programs that the level of economic activity would be much slower and lower. Am I the only person that finds it strange that these same people who claim expertise in artificially “stimulating” such activity always blame the level of such activity upon “unbridled laissez faire capitalism” and claim to have expertise in a simultaneous artificial de-stimulation of that economic activity?